The German DAX tried to rally at the beginning of the session on Friday, as people continue to see a lot of negative headlines coming out of the Middle East. Ultimately, this is a market that is moving on headlines more than anything else.
German DAX
The German DAX tried to rally at the beginning of the session on Friday but then fell apart. That being said, late in the day we did see a little bit of a recovery. And I think it is worth watching very closely because if we do continue to go lower from here, we could drop all the way down to the 23,000-euro level, which is an area that has been supported multiple times.
The market I think continues to see a lot of volatility and interest, but this is also a situation where there might be value hunters out there willing to take advantage of cheap contracts. If we were to break down below the 23,000-euro level, then I think that would be extraordinarily negative for the DAX.
External Influences and Market Support
Keep in mind that the German index of course is going to be very noisy overall as there are a lot of concerns about energy in the European Union and that obviously has a major influence here. With this being said, the Middle East crisis will have a major outsized influence on what happens next.
It is worth noting that the market continues to see at least people out there trying to jump on short-term moves that are negative. If we turn around and break above the 24,000-euro level, then we are ready to test the 200-day EMA. If we clear that, then it could open up a much bigger move, but I think we need good news over the weekend in order to really see Germany take off on Monday.